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Do we all pay 40% tax ?
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<blockquote data-quote="ProDave" data-source="post: 486121" data-attributes="member: 6969"><p>The CIS tax paid is just a way for HMRC to get their tax quicker than waiting for you to file your tax return at the end of the year. So is "cost neutral" to you apart from not having that £200 to play with for a few extra months.</p><p></p><p>But you are right, having been taxed 20% on your earnings, you are then taxed 20% on almost everything you buy new as well. Though if those "new" things are tools or work clothing, then their cost reduces your profit so reduces the tax you pay, so in effect you get your 20% VAT back in the form of less tax paid.</p><p></p><p>Don't forget the first £13K or so (I would have to check the current years figures) that you earn is tax free, so for low (part time) earners like me, the tax burden on earnings is lower. </p></blockquote><p></p>
[QUOTE="ProDave, post: 486121, member: 6969"] The CIS tax paid is just a way for HMRC to get their tax quicker than waiting for you to file your tax return at the end of the year. So is "cost neutral" to you apart from not having that £200 to play with for a few extra months. But you are right, having been taxed 20% on your earnings, you are then taxed 20% on almost everything you buy new as well. Though if those "new" things are tools or work clothing, then their cost reduces your profit so reduces the tax you pay, so in effect you get your 20% VAT back in the form of less tax paid. Don't forget the first £13K or so (I would have to check the current years figures) that you earn is tax free, so for low (part time) earners like me, the tax burden on earnings is lower. [/QUOTE]
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Do we all pay 40% tax ?
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